Mumbai: United Breweries Ltd (UBL), the maker of Kingfisher beer, has persuaded liquor baron Vijay Mallya to step down from its board and nominate a successor.
This decision comes in the wake of the Securities and Exchange Board of India (SEBI) barring Mallya and his six associates earlier this year, from accessing the securities market for alleged violations of the listing agreement, diversion of funds and fraud.
UBL had requested Mallya to step down as chairman of the company as early as February and now want him to quit the board as well.
SEBI’s decision was prompted by lenders, who declared him a “wilful defaulter”, reported Economic Times.
According to the Articles of Association between Heineken and Mallya, the joint venture partners in UBL, Mallya is entitled to be the chairman for life and retain his position as a non-retiring director, unless he nominates someone to replace him or voluntarily steps down.
The successor who Mallya nominates could come under the scrutiny lens of regulatory authorities. Meanwhile UBL has nominated CY Pal, one of the directors, as acting chairman and is urging for the appointment of a chairman, citing governance norms.
Mallya left the country and fled to the UK in 2016, amidst charges of money laundering banks seeking nearly Rs 9,000 crore in repayments. Although India has been seeking to extradite him, Mallya has denied any wrongdoing and claimed that he’s worried about not getting a fair hearing in India.
Mallya had earlier refused to step down from the board and UBL has stopped sharing confidential information with Mallya.
